Today's Focus

• SPH - 2Q15 results in line. Maintain HOLD, unexciting outlook for print ads, yet stock is supported by c.5% dividend yield.

2Q15 core earnings for SPH were within expectations but headline earnings were ahead, boosted by S$24m investment gains. Revenue declined by 1% to S$307m while operating profit improved 1% to S$112.4m, driven by lower material, staff and depreciation expenses. Print ad spend has registered negative y-o-y growth since 2014. We are neutral on SPH as we believe print ad growth will be soft on the back of tepid GDP growth and consumption spending. We believe this presents fundamental risks to earnings growth and upward resistance to the stock. Yet the stock is supported by a strong DPS payout of 21 Scts and c.5% dividend yield that limit its downside. Maintain HOLD, TP S$3.98.

Indofood Agri Resources has a diversified and vertically integrated business model. Going forward, we expect IndoAgri to focus on expanding its sugarcane estates and refinery capacity in Indonesia instead, given strict sustainability goals for oil palm estates. At its current level, we believe the counter is fairly valued. Lacking near-term catalysts, we reiterate our HOLD call, target price S$0.69.

mm2 Asia proposes to issue up to S$2.6m in aggregate principal amount of exchangeable notes, with option to issue up to an additional S$1.3m. The notes will bear interest at the rate of 2.5% per annum. The notes are exchangeable into new shares of mm2 Asia based on exchange price of S$0.5635 or new shares of the cinema subsidiary. The rationale for the proposed exchangeable notes issue is to increase resources available to the Group to grow its existing business activities which are principally that of movie production, development, creation and distribution, which shall include cinema operations.

ST Engineering announced that its aerospace arm has secured new contracts worth $920m in the second quarter of 2015. These new orders involve projects ranging from airframe, component and engine maintenance, to engine wash and pilot training.

Sunpower Group proposes to issue up to 400m shares at an issue price of S$0.14 per placement share, raising gross proceeds of up to S$56m. Sunpower Group is evaluating various environmental projects in China, which may include environmental related engineering, procurement and construction, as well as build-operate-transfer, build-ownedoperate and/or transfer-operate-transfer projects.

Nera Telecommunications has received a contract of approximately S$10.6m. The contract is in relation to the supply and delivery of card payment terminals and software, for a financial institution in South East Asia.

The International Monetary Fund (IMF) brushed aside fears of a major disruption to the global economic or financial system in the wake of the Greek crisis and the collapse in Chinese stock prices. In the latest quarterly update to its World Economic Outlook (WEO), the IMF projected global growth at 3.3% this year on the back of a gradual pickup in advanced economies and a slowdown in emerging economies. In 2016, IMF expects growth to strengthen to 3.8%.

US markets rebounded following the rebound on Chinese stocks but ended off session highs as the recent saga on Greece approaches a climax this weekend. Chinese stocks rebounded, with more than half the country's listed companies still under trading halt, after regulators banned major stockholders from selling stakes. The euro strengthened and European stocks rebounded after Greece proposed reforms similar to those demanded by creditors in return for a financial bailout. Investors viewed that this boosts the chances that the nation will remain in the Eurozone. Upcoming Seminar

Source: DBS